“Creators are the new retailers” – but influencers are losing brands in an economic downturn

Latest poll from US and UK influencers reveals payment issues from brands in the last year, whilst LTK says spend on influencer marketing is growing.

Following the latest quarterly AA/Warc report which suggests that ad spend would stifle in 2022 and shrink in 2023, HypeAuditor reached out to influencers asking how the economic downturn had affected their businesses.

The results highlighted that brands have started cancelling campaigns, reducing fees and brokering gifting-only deals. 

In particular, the survey, which polled influencers in the US and UK, from mega-influencers with over one million followers to micro-influencers with under 10,000 followers, shows:

  • Just under half of all 146 influencers, who took part in the survey, said they have experienced payment problems since the economy started to dip in March 2022.

  • 40% of influencers also reported working with fewer brands this year than in 2021.

  • However, the majority (76%) of those surveyed haven’t considered giving up the job.

However, brand investment in collaborations at influencer marketing platform, LTK, is up 50% YoY.

Robin Ward, Head of Sales, Europe, LTK said: “Over the past decade, we’ve witnessed the rise of influencer marketing to become the $16.4 billion industry it is today. Over that time, there have been moments of recession and market challenges, and influencer marketing has remained resilient. In the current economic downturn, the appreciation and understanding of the power of creator-driven marketing and commerce has never been stronger. While marketing budgets are scrutinised, we’ve seen spend on influencer campaigns are growing when compared to more traditional marketing channels.”

This correlates with the research which shows that only 22% have received a pay cut in the last 12 months.

“At LTK, we are continuing to see an increase in investment from brands,” continued Ward. “This year represents the largest investment for nearly all brands on LTK, with creator investment up meaningfully across all categories. In H1 alone, we saw a more than 50% year-on-year increase in spend in Europe with LTK Creators from brands.”

UK influencers less likely to continue than US influencers

However, UK influencers have been hit harder, according to the survey, with 38% having been asked to reduce rates compared to 21% in the US, and 52% working with fewer brands compared to 37% in US. 

This also translates into willingness to continue influencing with 62% of UK influencers willing to continue compared to a larger 78% of US influencers.

“Creators are the new retailers” 

“Creators are the new retailers,” stated Ward. “They are the curators of the internet and, beyond awareness tactics, brands’ wider marketing channels are turning to creators to drive billions of dollars in sales on LTK alone, as well as to foster brand loyalty and licence their content. As the cornerstone of future marketing models, brands must continue to leverage the authority and authenticity of influencers to reach their audiences – as consumers are motivated to shop by trusted guidance and recommendations.

“Given the scrutiny on budgets, brands are taking a data-led approach to planning their campaigns to ensure they are maximising ROI. They can optimise campaign performance by going beyond vanity metrics like comments and likes, and instead measure the sales and full-funnel performance that is driven by creator commerce. This ultimately makes brands more strategic in their approach to influencer-led campaigns and ensures budgets of all sizes are fully maximised,” Ward concluded.